2020-01 Ordinance Amending City Code Chapter 67 - Building Code

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City Manager DATE: 1/6/2020 MEMO: 2020-02 TO: Honorable Mayor Moore Wolfe&City Council Members FROM: Scot Wrighton,City Manager Jon Kindseth,Deputy City Manager David Greenwell,Building Inspection Manager SUBJECT: Consideration of Ordinances Amending Chapters 67,67.2,68,69,&70 as they relate to fees. SUMMARY RECOMMENDATION: Staffrecommends approval of the five following Ordinances which will primarily modify the fees staff collects when processing and issuing building permit fees. BACKGROUND: Staff has performed an analysis of our surrounding peer communities and deternuned we are significanfly lower than any others. More irnportantly than tlus is the fact that the City loses money on our pernutting service as currently provided. Our current fee structure is very complex and confusing for the average property owner,general contractors,and our staff tasked with administering this service. The pernut fees are currently found in five separate ordinances depending upon the type of work being done. Under our current fee model,we lose money on the smallest projects and the larger,more complex projects. The biggest benefits of this new fee shucture is the si�licity of knowing what the fees are for any project that a person would undertake. The fees are based on the value of the work being done by the owner or contractor. The City will start charging for full plan reviews,as opposed to the current structure where plan review and inspection costs are absorbed by the City with the issuance of a pernut fee. We believe the new fee structure is a more equitable model and thus we have seen this same trend among other professionally managed communities. Even with this fee increase,it is not eacpected that pernut fees will cover all expenses related to processing and administering the building department division. Ow fees will be more in line with unincorporated Macon County after this change,whereas now our fees are only about 50°/a of what theirs are. Most permits for residential or commercial repairs are not likely to be impacted by this change. Most small projects are only going to be subjected to the minimum permit fee,thus not significantly impacted by this change. The pernuts that will be impacted are the smallest fee pernuts like fences,where they were$10 they will now likely be$50. The most significantly impacted projects are the large new construction projects,where fees were not covering the plan review or inspection costs historically. Over the next year,the City will sMve to conduct a more detailed analysis of the building division to determine if these new fees are adequate to cover costs,over if additional changes should be made to get pernut related fees to cover the administration costs of providing this service. This proposed increase in building fees was tentatively authorized by the City Council during their review of the recommended FY 2020 budget. These five ordinance amendments implement tivs council directive. PRIOR COUNCIL ACTION: A comprehensive permit fees modification has not been done in the past decade or longer. Most of our current fees are significantly lower than what we believe to be the market average. A brief discussion over raising pernut fees was had during the budget workshops in November. POTENTIAL OBJECTIONS: There are no known objections to this recommended approach to the pernut fees. INPUT FROM OTHER SOURCES: Staff used budget data and fee schedules from our neighboring communities of Champaign,Peoria,Bloomington,Normal, Springfield,Quincy,and Macon County. STAFF REFERENCE: Jon and David are available to answer any questions and will be in attendance at the City Council meeting to provide answers not previously provided. BUDGET/TIME IMPLICATIONS: Currently taxes and general fund revenues are being used to subsidize the expenses related to pernutting a new house being built in Decatur,for example. The increase in pemut fees will reduce or eliminate that subsidy,and set the user fees to a level that pays for the service.